Wealth gap hammers minorities

On Aug. 28, 1963, Dr. Martin Luther King Jr. led a March on Washington that focused in part on economic equality.

By Michelle Singletary

recordnet.com

By Michelle Singletary

Posted Aug. 16, 2013 at 12:01 AM

By Michelle Singletary

Posted Aug. 16, 2013 at 12:01 AM

» Social News

On Aug. 28, 1963, Dr. Martin Luther King Jr. led a March on Washington that focused in part on economic equality.

"The Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity," King said that day.

Fifty years later, the income and wealth gap for minorities is still wide and troubling. The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to the Pew Research Center.

And the Great Recession didn't help an already bad situation. The average net worth of households in the upper 7 percent of the wealth distribution chain increased 28 percent during the first two years of the recovery from the downturn, compared with a 4 percent drop for households in the lower 93 percent, according to Pew's analysis of data from the Census Bureau.

Another Pew report found that the decline in housing prices during the recession had a much greater impact on the net worth of minorities, relative to that of whites, because housing assumes a larger share of their portfolios.

The Urban Institute's Opportunity and Ownership Project recently issued a report that similarly examined the chasm that separates the haves and the have-nots.

In 2010, the average income for whites was twice that of blacks and Hispanics - $89,000 versus $46,000, and whites on average had six times the wealth of blacks and Hispanics - $632,000 compared with $103,000, according to the Urban Institute.

But it's the wealth gap that the authors of the report rightly focus on. Over the past 30 years, Americans in the top 20 percent saw their average wealth increase by nearly 120 percent, while families with wealth figures in the middle quintile saw growth of 13 percent. The folks in the bottom 20 percent saw their net worth drop below zero, meaning their debts exceeded their assets.

The great wealth gap helps explain "why many middle-income blacks and Hispanics haven't seen much improvement in their relative economic status and, in fact, are at greater risk of sliding backwards," the report says.

"We cannot afford to write off a majority of the next generation and still prosper as a great nation," the Rev. Jesse Jackson wrote in a recent Chicago Sun-Times commentary.

When I write about the economic state of minorities, I brace myself for the racist, vitriolic comments that follow. Highlighting economic inequalities isn't about asking for handouts. It's about finding ways to give people a hand up so that they can become self-sufficient. When the financial lives of the less fortunate are lifted, we all are lifted.

As King said in his "I Have a Dream" speech that summer day 50 years ago, we all have to realize that our destinies are tied up together. "We cannot walk alone," he said.

Contact Michelle Singletary, a financial columnist at The Washington Post, at michelle.singletary@washpost.com.